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Yahoo Buys BlueLithium Ad Network

Yahoo on Sept. 4 agreed to buy online ad network BlueLithium for $300 million in cash, in a move to fortify the companys position versus Google and Microsoft in the competitive market for placing ads on the Internet.

BlueLithium, of San Jose, Calif., snaps up banner and other graphical ads from Web publishers and resells the real estate slots to online advertisers. ComScore Media Metrix rates BlueLithium as the fifth largest ad network in the United States, with 145 million unique visitors each month.

Further reading

If a user clicks on sites about buying houses, BlueLithium may pair real estate ads with that consumer. The company also offers "spot buying" capabilities to extend advertisers reach to target audiences.

The BlueLithium deal comes after several organizational changes at Yahoo, taking place during a few weak financial quarters. In July, Yahoo said its second-quarter profit dropped 2.3 percent to $160.6 million.

The purchase of BlueLithium should boost Yahoos plan to branch out beyond its own well-known brand at a time when advertisers are looking beyond the large portals.

The deal is the latest in a string of similar deals by online ad portals. Earlier in 2007, Google bought DoubleClick for $3.1 billion, Yahoo snapped up the 80 percent of Right Media it didnt already own for $680 million and Microsoft picked up aQuantive for $6 billion.

Yahoo, based in Sunnyvale, Calif., said in a statement that publishers will have greater access to advertising budgets through Yahoos sales force and through the Right Media Exchange, where BlueLithium will be an active participant.

Should the deal close in the fourth quarter of 2007 as expected, BlueLithium will become a wholly owned subsidiary of Yahoo, with BlueLithium founder, Chairman and CEO Gurbaksh Chahal remaining with BlueLithium through the integration.

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